Last week Business Insider published 10 huge business successes born from early failures. In my experience, these aren’t exceptions to the rule, they are the rule.

Oh, and the successes? Have you heard of them? How about AOL, Twitter, Intel, Microsoft . . . and those are just the first four. Microsoft (the example shown here to the right, an early picture of Microsoft, with Bill Gates at lower left) started doing a BASIC compiler for the Altair 8800, a computer that ceased to exist before the company made any money.

The point is that most businesses evolve. Business plans evolve. You don’t blindly follow the plan; you keep reviewing and revising the plan until you figure out something that works.

(Illustration: from the Business Insider post, 10 huge business successes born from early failures.)

I’ve followed the Free controversy myself, and posted about it here on this blog, and  here on the Huffington Post, when two of my favorite authors, Malcolm Gladwell and Seth Godin, squared off about it a few months ago. Gladwell essentially hated the idea, and Godin declared it here whether we like it or not.

If I had to choose one short description of the basic idea, it would be this paragraph from Anderson’s 2008 story in Wired:

Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multi-player online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.

King has a gift for summary. He says in his post:

Free has been used effectively as a business strategy and marketing tactic for pretty much as long as businesses have existed. Given how widespread and successful free is and has been, I don’t see how you challenge the concept.

The only place I see room for criticism is if you think Anderson is suggesting that free is a complete business model. Obviously, if free means no source of revenue then it is destined for failure. But I don’t think this is what Anderson is suggesting.

King goes on to point out several examples. He also points out that it could be tactic, strategy or something else. And it’s not that new an idea, either (Chris Anderson would agree with all three).

Are you looking at using a free offer as part of a business plan? You’ll have good company. I do hope, though, that you define for yourself the specific business objectives (traffic, visibility, whatever) and put in some metrics so you can measure results.

(Image credit: from Wired.com, Free! Why $0.00 Is the Future of Business)

One of the real core values of business planning is filtering ideas to pick out the opportunities. Ideas are of little or no value, and opportunities are potential businesses only if somebody actually makes it happen. In “Beyond Eureka” at BusinessWeek.com, Amy Barrett has an excellent summary of how that process really works in actual cases. She explains:

On the pages that follow, we outline the methodology followed by successful entrepreneurs to find, vet and develop their ideas. We’ll show you how to outline your goals for the business, brainstorm possible concepts, screen opportunities and test your ideas’ viability. Sure, you could wait for a bolt from the blue–but isn’t it better to create your own?

The story breaks it into five steps. For each, the story goes first for the theory, then examples in practice. The following is just a bare summary:

1. Set the stage: Basic parameters, such as lifestyle vs. high-end high-tech, establish your strengths, and directions.
2. Brainstorming ideas: Quantity first, sorting for quality later.
3. Picking a winner: This is selecting from those ideas–based on more research and planning–the one that has the best chance of working.
4. Feasibility: Answer three questions: Can we do it, do they want it and what will they pay.
5. Prototype: Make it real, put it up, get customers, get feedback, get going.

The rest of the story is a good review, step by step, with examples from real people and real companies. And I like this different angle on business planning, which goes right back to some of the core concepts. You might notice, as you read the details, that the planning is very much there; but there’s no talk of the actual plan document.

Seth Godin suggested this the other day, in Crowded at the Top:

The very best time to launch a new product or service is when the market appears exhausted or depleted. There’s more room at the top and fewer people in a hurry to get there.

He cites four specific markets that seem to fit this general pattern:

The next golden age of journalism, of communications, of fashion, of car design–those are being established now, in a moment when it’s not so crowded at the top.

That makes sense in general, but you have to be careful. Sometimes markets crumble because something else replaces them, or the need dies, or fashions change forever. Think about buggy whips, telegrams, cassette tapes or hula hoops. The underlying needs are still there, but the actual markets have died where they were and been reborn somewhere else.

(Photo credit: Vibrant Image Studio, Dean Pennala/Shutterstock)

It tells the story of Sean Callahan and his TweetPhoto, a Twitter-related photo sharing that launched over Twitter. Callahan was worried about waiting while the established leader, TwitPic, got bigger. So he launched while still finishing his degree in London.

Over the next few months, Mr. Callahan’s Twitter stream and blog documented, blow by blow, the startup of a new business, with all of its victories and defeats. His experience suggests that wise use of social media could help speed the birth of many new ventures–not just those involved in social networking–if a business owner knows how to connect with the right people, learn from their conversations and weather the ups and downs that come with this new form of communication.

It’s an interesting story. And there’s also the advantage of publicity; in this case it was on WSJ.com, and here I am posting about it. I’m sure that TweetPhoto isn’t the only business launched this way on Twitter, but this is the one we’re looking at.

(Photo linked to the PFSK source)

The explanation, in part:

It’s a unique new effort that offers four different perspectives on the same scene simultaneously. In telling the same story from four distinct points of view, each side of the cube stands alone as an engaging film, and as a piece of a larger puzzle. As viewers move around the cube, they watch the story unfold from different perspectives, forming different perceptions of the characters and plot.

This resonates for me. Everything comes in different points of view, beginning with stories. Did you see the movie called Vantage Point, from 2008, that presented the same 10 to 20 minutes from five or six points of view?

Every story has multiple points of view. You just have to figure out how to tell it.

So now, as a Kindle owner and Kindle reader, I love the Apple iPhone Kindle reader app. It means even without carrying the Kindle around, I always have access to my books. The synchronization works perfectly.

What I need now is a Kindle reader on my laptop. That’s one for Mac, one for Windows. Since I travel with my laptop anyhow, why not plug it in at night and use it to read my books.

Whoops–that’s a business problem for Amazon.com, right? Messes with its Kindle sales? I suppose, but the iPhone does that already. And it would mean I’d buy even more books.

Just a suggestion.

(Image: Helder Almeida/Shutterstock)

I clicked and visited the site. I found a very nice-looking site. I’m not sure I’d use it, but I am sure that the look and feel were all positive. I wasn’t sure I’d pay the subscription price, but that’s not the point.

The point is a reminder that a good idea and a market need; necessary but not sufficient conditions for a new business. You can’t make it without that. But having that doesn’t mean you are going to make it. Lots of good ideas with market needs fail.

Of course there’s nothing in any business plan that guarantees success; but the idea alone means nothing without the management team, marketing strategy, financial plan and product/market focus.

Lots of great products, services and website businesses have failed for reasons beyond the basic need or idea.

This three-minute reminder from Kawasaki is what we baby boomers would call “an oldie but goodie.”  I found it over the weekend on Stanford’s eCorner entrepreneurship video site–which is an excellent resource. It’s a collection of talks, broken conveniently into segments like this one. It’s from 1993 and, despite recession and a lot of changes, it’s holding up just fine to the ravages of time. It’s as valid today as it was then.

I do have that one reservation, however. I hope it’s obvious. If you take this idea too literally, and do what you love without any regard for what other people will pay for, then it doesn’t work. You need empathy and common sense. Love skiing? Teach it, make gear, do a store, build a website, do something related that people will pay for. Does that make sense?

Business advice? Look at this picture. Imagine you’re driving. You have to choose one lane; you can’t take two or all three lanes.

That’s a lot like developing strategy in a small business or a startup. It isn’t just what you do; it’s what you don’t do that matters. Not just whom you address, as a target market; but also whom you don’t address.